ITAT Remands Demonetisation Cash Deposit Case After Assessee Suffers Severe Fire Injuries:

The assessee is Pradeep Kumar Sabbisetty who had deposited cash amounting to Rs. 12,42,700 in his bank account during the demonetisation period. Based on information received by the Revenue, the AO issued notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961, through the e-proceedings portal, seeking an explanation regarding the source of the cash deposits and copies of the relevant bank statements. However, despite issuing four hearing notices, the AO received no response from the assessee. Consequently, the AO completed the assessment by treating the entire amount of Rs. 12,42,700 as unexplained money under Section 69A of the Act and levied tax under Section 115BBE at the rate of 60%. The CIT(A) sustained the addition made under Section 69A of the Act.

During the proceedings, the assessee explained that the appeal before the Tribunal had been filed with a delay of 101 days due to a serious fire accident in which he suffered severe burn injuries. The injuries were so serious that he had to undergo major surgical procedures, ultimately resulting in the amputation of both his upper limbs. Considering the medical circumstances and the explanation furnished, the Tribunal condoned the delay and admitted the appeal for adjudication.

After considering the submissions and examining the material on record, the Tribunal observed that the orders passed by both the lower authorities were ex-parte and that the merits of the case had not been examined due to the assessee's non-compliance. The Tribunal also took note of the photographs placed on record, which demonstrated the severe medical consequences of the fire accident, including the amputation of both hands.

Accordingly, considering the peculiar circumstances of the case, the Tribunal decided to grant the assessee one more effective opportunity to explain his case before the AO. The matter was remitted to the AO for fresh examination of the issues and passing of an appropriate order after considering the assessee's submissions.